Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of JL Beers Franchise Costs (2014 FDD)

by Franchise Chatter on March 20, 2015

in Beer and Wine Franchise, Franchise Costs, Hamburger Franchise

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JL Beers

Detailed Estimates of JL Beers Franchise Costs Based on Item 7 (Estimated Initial Investment) of JL Beers’ 2014 Franchise Disclosure Document

  • The typical size of a JL Beers Restaurant is approximately 3,500 square feet consisting of:  (i) 1,750 square feet on the main floor (seating, bar/kitchen area); (ii) 1,750 square feet in the basement (storage area); and (iii) additional patio seating for no more than 20 persons.
  • For several items discussed below, your cost will increase as the number of square feet increases.
  • While JL Beers strictly limits the size of your Restaurant to a maximum seating capacity of 49 persons, other factors may impact the size of your Restaurant such as landlord, municipality, or zoning board requirements or restrictions; and availability and cost of leased or purchased space.

1.  Initial Franchise Fee:  $20,000 to $40,000

2.  Leasehold Improvements:  $250,000 to $470,000

  • Typical locations for your Restaurant are smaller free-standing, multiple-use, and strip mall locations.
  • Leasehold improvements include architecture and engineering fees, lighting, flooring, and partition walls. JL Beers anticipates that you will negotiate the cost of leasehold improvements as part of your rental expense.
  • JL Beers estimates that you will pay approximately $12 to $27 per square foot in rental expense (including common area maintenance and taxes) for your Restaurant premises.
  • You will incur greater start-up costs if you cannot negotiate the cost of leasehold improvements as part of your rental expense.

3.  Land and Building:  Not Applicable

  • If you purchase the land and building for your Restaurant, you will incur significantly greater costs in developing your Restaurant.
  • JL Beers estimates that the size of the lot on which you build the Restaurant premises will range from 25,000 to 38,000 square feet.
  • In addition, you may be required to provide landscaping or make other improvements to your site.
  • These estimates are based on JL Beers and its affiliates’ experience in the Midwestern United States. Depending on the geographic area in which you locate your Restaurant, your costs may be higher.

4.  Equipment, Fixtures, and Furniture:  $320,000 to $430,000

  • This amount includes estimated expenses for bar and kitchen equipment, smallwares/food equipment, an ATM machine, digital TVs and related audio/video equipment, digital camera, floor scrubbing machines, menu boards, surveillance cameras and security system, waste container, phone system, office supplies and equipment, a safe, and other miscellaneous items.
  • JL Beers may require you to purchase certain equipment and other items from it or its designated suppliers. You may purchase or lease approved brands and models of other equipment, fixtures, and furniture from any approved supplier.

5.  Initial Inventory:  $22,000 to $28,000

  • You will need to purchase an opening inventory of food, beer, soda, and retail items that complies with JL Beers’ specifications and is purchased from JL Beers or approved suppliers. JL Beers may be an approved supplier for certain items.
  • This amount does not reflect amounts needed to replenish inventory during the initial stage of operation.

6.  POS System:  $20,000 to $24,000

  • JL Beers requires you to purchase the designated Restaurant point-of-sale system from its designated supplier, currently North Country Business Products.

7.  Signage:  $18,000 to $22,000

  • JL Beers requires you to purchase interior and exterior signage that meets its specifications. The cost of signage will range from approximately $18,000 to $22,000 for a building sign on leased properties, to approximately $38,000 to $42,000 for a building sign and a free-standing monument or pole sign if you purchase your land and building.
  • Additionally, interior beer neon signage is often provided at no cost from the beer distributors.

8.  Training Expenses:  $3,000 to $6,000

  • Training expenses include salaries, benefits, lodging, meals, and travel expenses for 3 people to attend the initial training program.

9.  Opening Advertising and Promotion:  $1,200 to $3,500

  • This amount includes estimated expenses for additional print media, neighborhood marketing, and other initial marketing efforts that you determine to be beneficial for your market, in excess of the items JL Beers provides as part of the opening package.

10.  Liquor License Fees/Expenses:  $1,000 to $50,000

  • The cost of obtaining a liquor license, including related legal and other fees, can vary significantly depending on the location of your Restaurant and the availability of liquor licenses.

11.  Miscellaneous Pre-Opening Expenses:  $12,000 to $20,000

  • Miscellaneous expenses include uniforms, legal and accounting fees, local license (other than liquor license) and permit fees, restroom mirrors, chalkboards, menu printing, awning and other window treatments, restroom sinks, and other items.

12.  Additional Funds  – 3 Months:  $102,000 to $138,000

  • This amount estimates the expenses you will incur during the first 3 months of Restaurant operations, including initial wages and fringe benefits, insurance premiums, rent (if you lease your premises), taxes, Restaurant supplies, advertising, maintenance and service contracts, repairs, utilities, and interest payments on any business loans as well as on any interim financing or construction loans.
  • These amounts are estimates and JL Beers cannot guarantee that you will not incur additional expenses in starting the business.

13.  Total:  $769,200 to $1,231,500

  • This total is based on JL Beers’ estimate of regional (Midwest) average costs and prevailing market conditions; its predecessor’s (and its affiliates’) 4 years of experience; and its management team’s combined 75+ years of operating fast-casual, casual, and quick-service restaurants.

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